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Old 07-12-2015, 06:51 AM   #521
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From the Internet, why many countries don't trust Greece
Greece Crisis: Why European Leaders Don't Believe Greece's Promises

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"The desire to help in such situations, whether motivated by politics or not, has already been the undoing of Greece’s attempts to reform its pension system. In 2012, under the terms of its previous bailout deal, the Greek government promised to close one of the most infamous holes in this system: the list of so-called “arduous” professions, whose workers are allowed to retire years and sometimes decades earlier
than the European average. Over the years, this list had grown to include some 600 professions—among them opera singers, hairdressers and television anchors—as a succession of Greek governments tried to win their support by letting them retire early.

“This is clientelism at its finest,” said Platon Tinios, a professor at the University of Piraeus, near Athens, who studies Greek pensions. “It is a system that’s completely mad.”

The 2012 reforms were meant to cut about 30% of the professions from this list—including the three mentioned above—but in practice the Greek government introduced a gaping loophole, said Tinios. Anyone who had worked in an “arduous” profession for 10 years or more could still retire under the previous rules. That meant the reform will be practically worthless for the next 20-25 years, Tinios said. Moreover, the revised list of “arduous” professions still includes many that do not seem arduous enough to warrant early retirement: workers in food retail, for instance, or the fish, cheese and ham industries."
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Old 07-12-2015, 07:52 AM   #522
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^

Wow, if you sang, whilst cutting hair, after making a ham & cheese sandwich, you'd likely be able to retire age twenty.
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Old 07-12-2015, 09:10 AM   #523
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While all of this may be difficult to understand, there IS a simple explanation:

Quote:
Explanation of the Greek Bail Out



It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the tavern.

The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.



....................................And that, Ladies and Gentlemen, is how the bailout package works.
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Old 07-12-2015, 09:18 AM   #524
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While all of this may be difficult to understand, there IS a simple explanation:
The only difference with reality in the Greece bailout is that the German never gets the 100 Euro note back!
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Old 07-12-2015, 09:21 AM   #525
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The only difference with reality in the Greece bailout is that the German never gets the 100 Euro note back!
+1000
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Old 07-12-2015, 09:24 AM   #526
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For some reason this song comes to mind
.
.

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Old 07-12-2015, 09:30 AM   #527
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So it could be that all this chart shows is that austerity was metered out to the countries that needed it the most. And that Greece among all the countries, chose not to participate in its own recovery.
Also, the UK is missing (I know, this is eurozone data). They famously did the austerity thing and are growing faster than anyone else now.

NL was hard hit by the housing crisis (price drops >20%, level of mortgage debt was unsustainable there, and is being paid off). It is now growing better & faster than Belgium even though it cut much deeper than the chart implies. Belgium is lagging in reforms and paying for it today, it escaped the housing crisis early on since lending was always alot more restrictive.

Finland spent more and shrank (!). The Nokia implosion is no small contributor to that. Once 4% of GDP and 70% of its stock market by value, now just a blip.

The main thing the chart does show in my view is that Greece is a strong outlier.

Austerity in itself is too vague to say anything useful about. What is important is where you cut, invest, and more importantly reforms. Broken window fallacy comes to mind here too.
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Old 07-12-2015, 09:36 AM   #528
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Austerity in itself is too vague to say anything useful about.
It's a lot like "reform". Some reform is good, some not so good. The devils in the details.
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Old 07-12-2015, 10:05 AM   #529
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It takes two to tango, so the lenders should have never made the loans to a risky borrower. They are just going to have to write off most of it.
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Old 07-12-2015, 10:20 AM   #530
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Originally Posted by aja8888 View Post
The only difference with reality in the Greece bailout is that the German never gets the 100 Euro note back!
+1


Even as I feel bad for the suffering Greek people, they just need to grow up.
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Old 07-12-2015, 10:24 AM   #531
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For some reason this song comes to mind
Could the reason be that I posted it earlier, here?
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Old 07-12-2015, 10:30 AM   #532
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We used to dance to the Cha Cha beat, and Santana's tunes used to be among our favorites. I have not danced in decades, but with my daughter's wedding coming up, have tried to talk my wife into rehearsing the steps, but her response has been lukewarm. Of course, the bride and groom would not know about this music. I would have to give them my CD or an MP3 file.

Wouldn't it be great to have forum members all doing the Cha Cha steps?

While the Greeks are suffering?
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Old 07-12-2015, 10:31 AM   #533
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Could the reason be that I posted earlier, here?
Probably
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Old 07-12-2015, 11:12 AM   #534
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Originally Posted by Totoro View Post
Also, the UK is missing (I know, this is eurozone data). They famously did the austerity thing and are growing faster than anyone else now.

NL was hard hit by the housing crisis (price drops >20%, level of mortgage debt was unsustainable there, and is being paid off). It is now growing better & faster than Belgium even though it cut much deeper than the chart implies. Belgium is lagging in reforms and paying for it today, it escaped the housing crisis early on since lending was always alot more restrictive.
Please don't tell Paul Krugman this, he'll have an aneurism. He's been Johnnie-one-note on his "austerity is dumb" campaign for so long that I don't know where he'll find anything to write about as the situation becomes more clear.

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Austerity in itself is too vague to say anything useful about. What is important is where you cut, invest, and more importantly reforms. Broken window fallacy comes to mind here too
+1. I suppose "austerity" and "reform" are both loaded terms chosen by people with different viewpoints about the way forward. What is important is whether the system is fixed so that incentives are improved for activity that produces goods and services of net higher value than the starting conditions. Putting euros into the system just so they can be passed around and everybody takes some is not going to help Greece improve in the long term.
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Old 07-12-2015, 11:28 AM   #535
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Please don't tell Paul Krugman this, he'll have an aneurism.
Yabbut....there's gotta be a downside too?
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Old 07-12-2015, 11:41 AM   #536
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It takes two to tango, so the lenders should have never made the loans to a risky borrower. They are just going to have to write off most of it.

Well, the problem right now is that Greece wants MORE money....


And what does write off mean.... Sure, they probably will not get paid for it, but that does not mean they will forgive the debt....
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Old 07-12-2015, 12:49 PM   #537
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Also, the UK is missing (I know, this is eurozone data). They famously did the austerity thing and are growing faster than anyone else now.

NL was hard hit by the housing crisis (price drops >20%, level of mortgage debt was unsustainable there, and is being paid off). It is now growing better & faster than Belgium even though it cut much deeper than the chart implies. Belgium is lagging in reforms and paying for it today, it escaped the housing crisis early on since lending was always alot more restrictive.

Finland spent more and shrank (!). The Nokia implosion is no small contributor to that. Once 4% of GDP and 70% of its stock market by value, now just a blip.

The main thing the chart does show in my view is that Greece is a strong outlier.

Austerity in itself is too vague to say anything useful about. What is important is where you cut, invest, and more importantly reforms. Broken window fallacy comes to mind here too.
UK suffered GDP drops the first few years after Cameron took over.

Germany is on a bigger austerity kick, trying to balance its budget. They have some slogan for it. They get away with it with mercantilist behavior which gives them 8-9 % of GDP trade surplus. They're not suppose to maintain a high trade surplus under EZ rules yet nobody demonizes them.

Eu growth is much lower than the U.S. since the financial crisis. Why is that? What did they do differently?

Oh they didn't do massive bank bailouts or a fiscal stimulus or monetary stimulus. Trichet kept rates higher than the Fed and no QE until Draghi started it within this past year.

If the EU has growth at all, it's despite austerity, not because of it.
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Old 07-12-2015, 01:17 PM   #538
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I might get flamed for this, but I'd like to see this thread move to a higher plain. Let's keep our political bias in check.
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Old 07-12-2015, 01:22 PM   #539
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I might get flamed for this, but I'd like to see this thread move to a higher plain. Let's keep our political bias in check.
+1
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Old 07-12-2015, 01:27 PM   #540
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Greece needs a bailout of $96 billion...wow!

https://twitter.com/cnnmoney/status/620296473570316288


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